Cont…

Mr Matthew Adams
By email: / Information Rights Team
(Freedom of Information Act)
4th Floor
Royal Mail Sheffield
Pond Street
SHEFFIELD
S98 6HR


Dear Mr Adams

Re: Freedom of Information Act – Request for Internal Review (RefKFEN-8FLASA)

I am writing in response to your email dated Monday 2nd May 2011 in which you requested an internal review of the handling of your recent request for information from Royal Mail Group. We have now reviewed this request, in line with our obligations under the Freedom of Information Act, and I am writing to inform you of the outcome of this review.

In your request submitted on Sunday 3rd April 2011 you requested the following:

“Please could you tell me the price Royal Mail is charging for the delivery of election material?

Please could you break this down, into the following?

-The price for Poll Cards

-The price for addressed literature

-The price for unaddressed literature”

In the response dated 28th April 2011, it was confirmed that the requested information was held by Royal Mail Group. However, the information was withheld under section 43(2) of the Freedom of Information Act. We have therefore considered whether this exemption was correctly applied in this case.

Section 43(2) – Commercial Interests

Under section 43(2) of the FOI Act information is exempt if its disclosure would or would be likely to prejudice the commercial interests of any person or body – including Royal MailGroup. A commercial interest relates to the ability to participate competitively in a commercial activity, i.e. the purchase and sale of goods or services. The delivery of addresses and unaddressed candidate election material is a bespoke, tailored service, provided by Royal Mail at commercially negotiated prices.

Royal Mail operates in highly competitive communications markets. In the case of this particular information, disclosure of the prices agreed for the service would provide helpful insight to competitors seeking to target this business and enable them to formulate their strategy. This in turn would weaken Royal Mail’s position when bidding for services in the future and therefore be damaging to its commercial interests. Even if a competitor of Royal Mail was not in a position to take on the full market, the rival company could attempt to target parts of the market e.g. certain geographical areas, or certain types of election literature. Royal Mail’s pricing information would still therefore be likely to inform their activities in competition with Royal Mail. In addition, this pricing information would provide competitors with an unfair insight into a bespoke agreement made by Royal Mail – this would inform their competition with Royal Mail for other similar business. Consequently, Royal Mail believes that the information, if disclosed, would be likely to prejudice its commercial interests in the future.

In the case of Poll cards, the price for their delivery is based on standard rates offered to local authorities, from which they can choose the services they wish to use for their mailing. The actual price varies depending on different factors such as the volume of mail and location meaning that different prices are calculated for mail drops from different Local Authorities depending on their requirements. However, the prices are calculated from standard rate tariffs which are available, for Royal Mail’s different types of mail drop, on our website ( Because this pricing information is freely available to customers and is not negotiated, it is not exempt from disclosure. I am sorry therefore, that this information was not provided in response to your original request. The chart below shows the standard rate tariffs for 2011 for the various different delivery options (for items such as poll cards) offered to local authorities:

tariff 2011
Service / Price £
Walksort 2nd class / 0.20654
Mailsort 2 1400 / 0.25571
Standard Tariff Letter 2nd class / 0.2646
Cleanmail Advance 2nd class / 0.23152
Walksort 1st class / 0.27324
Mailsort 1 1400 / 0.36036
Standard Tariff Letter 1st class / 0.36855
CleanMail Advance 1st class / 0.34114

Public Interest Test

Section 43(2) is a ‘qualified exemption’ subject to the ‘public interest test’ under the terms of the FOI Act. The review of your request therefore considered again whether the public interest in withholding some of the requested information outweighs the public interest in disclosing it. Royal Mail Group recognises that there is public interest in elections and the arrangements for delivery of material that may influence opinion and voting. There is also public interest in promoting transparency and the use of public funds. However, this has to be balanced against the public interest in protecting the commercial interests of Royal Mail.

It is not the case that these pricing details are already in the public domain. If standard prices were used then the information would already be available to the public. Royal Mail faces significant challenges in the present day and every single piece of business and possible future revenue is vital. As a publicly owned company there is direct public interest in the financial performance of Royal Mail Group and its brands. The interests of the public would not be served by harming the commercial interests of Royal Mail Group as would be likely if this information were disclosed. The financial well-being of Royal Mail Group and its brands is vital to support the provision of a universal postal service to the public.

In 2007 the Secretary of State for Business Enterprise and Regulatory Reform announced an independent review of the UK postal services sector. The final report to Ministers of this review ("the Hooper Report") stressed the public interest in the continued delivery of the universal service:

"A national network and uniform tariff are beneficial for the economy and society in a number of ways.

  • The national network strengthens social cohesion by ensuring that everyone, whether in urban, rural or remote areas, has an accessible, reliable means of communication and the capacity to send and receive physical goods. It also enables access to other services, such as internet shopping.
  • The universal service is important to the UK economy for precisely the same reason: it enables trade. Companies of all sizes rely on the postal service to build their business, supply goods and receive payment.
  • A uniform tariff protects those who use the postal service rarely or who live in areas of low population density. They might otherwise face a connection charge, higher prices or less convenient services.
  • An affordable service protects the ability of vulnerable consumers and those with lower incomes to send and receive goods, without the need for means testing.”

It went on to explain significantly that the universal service is reliant on the long-term viability of Royal Mail Group:

“Royal Mail is the only company currently capable of providing the universal service. That is likely to remain the case for the foreseeable future. Consequently, Royal Mail’s financial viability, its ability to invest to develop the business, and its response to the changing demands of its customers (including other postal companies) is vitally important to the universal service and to the sector as a whole.”

The Hooper Review was updated in September 2010. The update underscored again the importance of the universal service and warned that the continued delivery of the universal service is more precarious than ever before:

“Today, despite continued increase in the use of electronic media to communicate, the universal postal service remains highly valued and is still considered as important today as it was in 2008. The ability to deliver letters, packets, parcels and other items to all 28 million business and residential addresses in the UK six days a week, at uniform one-price-goes-anywhere tariffs, is part of the country’s social and economic glue.”

Royal Mail Group is reliant on commercial products and services such as this specially negotiated agreement. Any harm to Royal Mail Group’s commercial interests would in turn damage its financial health, which, as the Hooper report acknowledges, would have detrimental consequences for the delivery of the universal service.

Taking all of the factors highlighted above into account, Royal Mail Group believes that the overall balance of public interest is in favour of withholding pricing information for the delivery of addresses and unaddressed election material.

I am sorry that the information you requested cannot be provided in full on this occasion. However, I hope that the information provided above is useful and that this letter suitably explains our reasons for withholding the further details. In the event that you remain dissatisfied with the handling of therequest you do also have a right to appeal to the Information Commissioner who can be contacted at the address below:

Information Commissioner’s Office

Wycliffe House

Water Lane

WILMSLOW

SK9 5AF

Telephone: 01625 545 700

Yours sincerely
Colin Young
Information Governance Team
Company Secretary’s Office
Royal Mail Group Ltd is registered in England and Wales. Registered number 4138203. Registered office: 100 Victoria Embankment, London, EC4Y 0HQ.
© Royal Mail Group Ltd 2011– Page 1 of 5